Supply chain. Supply chain. Supply chain. The now ever-popular term seems to have become one of the key talking points in media and society, regardless of the industry you reside in. If the global pandemic never happened, most people in America may not have ever heard this word despite how vital this process is to everyday life. Yet now, you are very much aware of more long-reaching effects of the supply chain than you could ever wrap your head around. Have you attempted to order chicken wings from a restaurant recently? Some places cannot afford to carry these anymore because of their cost – a direct result of the supply chain disruption. Chances are that the availability of chicken wings does not have a direct influence on your business. But remember, this is a symptom of a very large problem. One worth understanding in greater detail.
To kick things off, MIT professor Jonathan Byrnes raised a point worth noting, “Many supply chains are perfectly suited to the needs that the business had 20 years ago.” Think about where the world was at 20 years ago and the vast differences that have occurred in that time. Digital technology alone has turned the globe on its head. A pandemic has certainly aided this process as well. But this is only the tip of the iceberg when it comes to what business owners have to say about the supply chain disruption. To find out more, please keep reading.
1. It might be time for a retool
We could get lost in the proverbial weeds talking about all the notable and highly-impactful global events which occurred over the last couple of years. While a trip down memory lane could be engaging, we will save that for another time. Instead, realize that some of these events have had a direct influence on the current supply chain disruption. Because of this, you and your company might be wise to find alternative sources of supply.
“Any kind of overseas shipping is an absolute headache right now given the state of the world,” said Rachel Roff, Founder and CEO of Urban Skin Rx. “If you can manage to find a domestic source for some of your products I’d advise you to do so. Even if you don’t use them, having them in your back pocket could save you.”
Of course, this is so much easier said than done. It likely took an arm and a leg to establish the current relationship you have with your suppliers. Doing that all over again, amidst the general disruption, is quite the tall-task. But then again, so was launching your company in the first place. So, if you are serious about staying in business, it might be time to form some new relationships.
“With how tedious US relations seem to be with other countries, relying on a sole product chain probably won’t work out well for you,” said Ryan Rottman, Co-Founder and CEO of OSDB Sports. “If you can retool this in any way it will serve you well.”
2. The situation might be getting worse
Unless you have been living under a rock, you are extremely cognizant of the ongoing invasion of Ukraine by the country of Russia. But what you may be unaware of is just how much impact this conflict has globally. Maybe you remember the sudden rise in gas prices at the beginning of the summer? This was a direct result of the Russian invasion and the global community’s countermeasures against it. This example only begins to touch on all the ways this invasion has affected the world. With the situation seemingly ongoing rather than at an end, this could mean continued issues for the supply chain in general.
“You may not want to hear it but the world is not going back to ‘normal’ anytime soon,” said Neel Shah, Founder of EZ Newswire. “In fact, I’d argue how we lived prior to modern invasion and pandemic is an old way of life. For businesses that rely on supply chains, this can be a problem if you don’t meet the problem head on.”
To think that the Russian invasion is the only factor at play here would be foolish. The wise words above stated as much. Truth be told, the world has in no way recovered from the litany of negative outcomes which came out of the pandemic. Some of these outcomes will likely never be made right. But to think they have up and disappeared entirely is nothing but wishful thinking.
“The pandemic wiped out some large businesses and suppliers entirely and we’ll never see them again,” said Karim Hachem, VP of eCommerce at La Blanca. “But it’s not like this has stopped overnight. Long standing companies continue to fold because the world has and is changing.”
3. Shipping is not the only issue
When someone has mentioned the phrase supply chain to you in the past, your first thoughts were most likely related to the transportation of goods. Rightfully so, this is a core function of supply chains in general. But, what may not have crossed your mind is the origin of this chain. Every product has a starting point, someone who creates it, a manufacturer for lack of a better term. It is very possible your manufacturers are experiencing and will continue to experience difficulties.
“There are still shutdowns and lockdowns around the world which are prohibiting portions of industry from going about their business,” said Annu Daniel, CEO of Elohim Company. “For a business state side, this is less than ideal as you’re likely already aware of.”
On the other end of shipping is receiving. Unfortunately, this area is not without its own issues. If you are unfamiliar with what is happening in regards to this it is essentially a traffic jam of large ships. The city of Los Angeles, one of the largest US ports of import, has rows and rows of boats at sea waiting to dock and unload their cargo. It has gotten to the point where ships have decided to sail around to the East Coast.
“If you run a business and haven’t been told some of your products are stuck out at sea you should count yourself lucky,” said Marilyn Zubak, Marketing Lead at Snif. “I know too many people who are currently dealing with this.”
4. Is a mountain being made out of a molehill?
Be it your grandmother posting on Facebook or one of the largest news broadcasting networks in the world, people love to make a bigger deal out of things than they really should. There are various reasons for doing so but that is none of our concern. Supply chain is what we are here for and what we will discuss. That being said, is society making a mountain out of the supply chain issues when in truth, they are more akin to a molehill?
“Supply chain efficiency and shortages have reached their lowest point in half-a-century,” said Melissa Rhodes, CEO of Psychics1on1. “If that isn’t scary, I’m not sure what is. Anyone who is telling you otherwise is living in a dream.”
But, why is this the case? You would think that as the world has “opened up” over the last few months, the supply chain statistics would begin trending upwards once again. So why are things at what feels like an all time low? Well, really, it is simply the result of many global events happening one after another. Chalk it up to bad luck if you want. But, the supply chain is not suffering for a sole reason.
“I can name five factors off the top of my head that have played their part in the recent shortcomings of the supply chain,” said Max Schwartzapfel, CMO of Fighting For You. “But that wouldn’t even begin to paint the whole picture. It’s a lot to process, honestly.”
5. So what now?
This piece may not have been the dose of reality you wanted, but it was the one you needed seeing as it is accurate to the present goings-on. But all this sourness does not leave room for hope moving forward. As a business owner or operator, how are you supposed to have any level of confidence in supply chain distribution? For starters, the US government has stepped in.
“Back in June, the White house had a press release detailing the forming of what they called the Supply Chain Disruptions Task Force,” said Sasha Ramani, Associate Director of Corporate Strategy at MPOWER Financing. “As this gets its legs underneath it, hopefully it can begin to make a difference.”
That being said, assuming that a task force can bring about noticeable change in the short term to an issue that is much bigger than just the United States is probably a bit much. Which means that you will need to find solutions of your own in the meanwhile. This fact might cause you to shy away from the impending addition of responsibilities and moving parts. But, if you want your business to survive, it is a necessary pursuit.
“I encourage anyone and everyone who has a business that depends on supply chain to find themselves two or three alternatives,” said Natália Sadowski, Director of Aesthetics at Nourishing Biologicals. “Your current source could dry up and disappear overnight. Or get stuck at sea.”
If all that these business owners have had to say is not quite clicking, maybe the words of political author Thomas Friedman will bring things full circle for you, “Supply chains cannot tolerate even 24 hours of disruption. So if you lose your place in the supply chain because of wild behavior you could lose a lot. It would be like pouring cement down one of your oil wells.”
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